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CHAPTER 19 - CHAPTER 19 1.The classes of transactions in...

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CHAPTER 19 1.The classes of transactions in the acquisition and payment cycle include acquisition of: d. goods and services, cash disbursements, and purchase returns and allowances. 2.The overall objective in the audit of the acquisition and payment cycle is: c. to evaluate whether the affected accounts are fairly stated in accordance with GAAP. 3.The audit of the acquisition and payment cycle often takes ____ time to audit than other cycles. c. more 4.What typically initiates the acquisitions and payment cycle? a. Issuance of a purchase requisition or request for purchase of goods/services. 5.What typically ends the acquisitions and payment cycle? b. Issuance of a payment to a vendor. 6.The receipt of goods and services in the normal course of business represents the date clients normally recognize: b. the liability. 7.Which of the following accounts is not included in the acquisitions class of transactions? c. Purchase discounts. 8.A document indicating a reduction in the amount owed to a vendor because of returned goods is: a. a debit memo. 9.A document used by organizations to establish a formal means of recording and controlling acquisitions which usually contains a package of documents about the acquisition is the: a. voucher. 10.The accounts payable account includes obligations for the acquisition of: d a. raw materials. b. equipment. c. utilities. d. all three of the above. 11.Comparing expenses to prior years is an effective analytical procedure for accounts payable because expenses from year to year are: d. relatively stable. 12.The overall objective in the audit of accounts payable is to determine whether accounts payable: a. is fairly stated and properly disclosed. 13.At what point do most companies recognize liabilities in the acquisition and payment cycle?
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c. Receipt of goods or services. 14.This computer-generated file records acquisitions, disbursements and allowances for each vendor. a. Accounts payable master file 15.This is a computer-generated file that includes all acquisition transactions during a given period. c. Acquisitions transaction file. 16.The major balance sheet account in the acquisition and payment cycle is: c. Accounts payable. 17.Which of the following business functions is not considered to be part of the acquisitions class of transactions? d. Processing cash disbursements. 18.It usually takes more time to audit the acquisition and payment cycle than other cycles because: c. of the large number of accounts affected. 19.A written purchase order is a legal document that is: a. an offer to buy. 20.For good internal control, the purchasing department should not be responsible for: d. authorizing the acquisition of goods. 21.Once a check is signed by an authorized person it is: b. an asset 22.The accounts payable department usually has responsibility for verifying the propriety of acquisitions by comparing the details on the: c. purchase order, receiving report, and vendor’s invoice.
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